Financing corporate legal costs: self-finance vs outside backing

In the course of Burford Capital’s nearly nine years in business and in talking to hundreds of lawyers about financing fees and disbursements associated with commercial litigation and arbitration, it has been our experience that quantifying and comparing the relative costs and benefits of financing models is the most effective way to talk to clients about legal finance. Once clients appreciate that external financing addresses several of the perpetual pain points associated with litigation – such as its negative accounting impact and its potential influence on share price – the decision to use legal finance seems simple. Clients who use litigation finance are united less by their need for cash to pay for legal costs than they are by their understanding of the comparative benefits of paying out-of-pocket versus working with a finance partner.